Why Orange's Dominance in Africa Forced Google To Pay For Traffic Over The Mobile Network

During an interview on France's BFM Business TV, CEO of France Telecom-Orange Stephane Richard talked briefly about the network's relationship with Google, and that the American company had reached "a balance of forces" with Orange (AFP). Following on from the report, Orange confirmed to The Register that "they pay us for the traffic that they send."

It's not just the admission of a financial transaction that is interesting, but the influences that have led to this relationship between the two companies. Yes, it's a net-neutrality issue again, but this time the story has confirmation of payment being from a provider of data to the carrier.

Over half the traffic on Orange's network comes from Google's services, bandwidth is a finite resource, and networks need to make money. Double-dipping both the consumer and the provider of data is one way of doing so. The arguments have been discussed many times before and will do again, but I wanted to highlight one moment from the discussions.

Orange have implied their strong market position in Africa provided them sufficient leverage in the discussions with Google.

The African market is currently making the switch from feature phones with limited data access, to low-cost smartphones that provide far greater access to the internet and web services. Low-cost smartphones that are predominantly powered by Android. Google wants the emerging market to be running their OS so they can effectively monetize the continent. What they don't want is another platform becoming established, such as Nokia's low-cost Windows Phones or the upcoming Blackberry 10 devices.

The carriers are the gateway to subsidized devices, and that puts them in a strong bargaining position.

This is a wedge moment. Google appears to have blinked and decided that Android's market share is more important than the principles behind net neutrality. Orange is quietly letting others know they have a deal in place, and you can be sure the rest of the world's networks are wondering how they can get their slice of the pie.